Friday, December 14, 2007

Chairman Majoras, FTC Reject Request for Recusal

This posting was written by John W. Arden.

FTC Chairman Deborah Platt Majoras will not recuse herself from the Commission’s review of Google’s proposed acquisition of DoubleClick Inc., based on DoubleClick’s representation by the Jones Day law firm, where her husband is a partner in the antitrust practice group.

In a December 14 statement, Chairman Majoras wrote that the relevant laws and rules “neither require nor support recusal.” Commissioner William E. Kovacic also released a statement that his wife was a member of Jones Day, but that her status did not warrant his recusal from the Google/DoubleClick matter.

Commissioners Pamela Jones Harbour, Jon Leibowitz, and J. Thomas Rosch issued a brief statement agreeing with the analyses in the statements of Commissioners Majoras and Kovacic. “It is evident that these Commissioners have at all times taken affirmative steps to conduct themselves in complete conformity with the ethical standards that apply to their positions.”

Complaint Requesting Recusal

The Chairman issued her statement in response to a Complaint Requesting Recusal, filed with the Federal Trade Commission on December 12 by two public interest groups. The groups—the Electronic Privacy Information Center and the Center for Digital Democracy—moved for recusal based on DoubleClick’s retainer of Jones Day “to represent the company before the Federal Trade Commission in the pending merger review.”

The complaint contains “some key factual errors,” according to the Chairman, including the statement that Jones Day represented DoubleClick before the FTC. The law firm of Simpson, Thacher & Bartlett LLP actually represents the company before the FTC. Jones Day “has never appeared or even been mentioned” in DoubleClick’s meetings with the agency or submissions to the agency, she maintained.

The complaint cited a statement on the Jones Day web site that the law firm “is advising DoubleClick, Inc. the digital marketing technology provider, on the international and U.S. antitrust and competition law aspects of its planned $3.1 billion acquisition by Google Inc.”

According to Ms. Majoras, “no one at the FTC was aware that Jones Day was involved in the EC review of this transaction until the afternoon of Tuesday, December 11, 2007, at which time staff learned and contacted me. Following my customary practice when I learn that Jones Day is or may be involved in a matter, I immediately contacted the FTC’s Ethics Official, and asked him to undertake a conflict of interest analysis.”

Financial Interest

The complaint further erroneously claims that the Chairman’s spouse, John M. Majoras, “is currently an equity partner with the law firm Jones Day,” the statement asserted. As of January 1, 2006, Mr. Majoras converted to non-equity status and became a fixed participation partner. Since Mr. Majoras does not have a financial interest in the firm’s income, no financial interest could be imputed to the Chairman.

“The FTC’s Ethics Official determined that, based on the applicable facts, including those described above, no impartiality conflict exists,” the Chairman wrote.

In a separate statement, Commissioner Kovacic indicated that his wife, Kathryn Fenton, also converted from equity partner to fixed partner status on January 1, 2006. As a fixed partner, her compensation will not be affected by changes in the firm’s income. Thus, the Commissioner announced that he would not recuse himself from the Google-DoubleClick matter.